Rolls-Royce Could Fly Into Deal Trouble

If Rolls Sells Its Energy Business, Investors Should Watch Carefully What It Does With the Money

By

Renée Schultes

Updated May 2, 2014 2:45 p.m. ET

Rolls-Royce Holdings is on the hunt for thrust.

The U.K. industrial company this week confirmed it was in talks with Siemens about selling its energy business, which makes gas turbines and compressors. But the risk is that selling the energy business propels Rolls into problematic deals elsewhere.

Investors wouldn't be sorry to see the back of the energy division, which has generated just £7 million ($11.8 million) in...